Brief Description: Traffic moves slowly in Kathmandu's
ancient and narrow city streets and distances travelled are
relatively short. Currently, there are 3,500 three-wheeled vehicles, tempos,
clogging Kathmandu's streets. These three-wheelers are the most
common form of public transportation in the Kathmandu Valley. They
account for 25 percent of all vehicular traffic in the city and
contribute over 60 percent of vehicular emissions. A very
conservative estimate of the cost of this level of air pollution is
$10 million per annum in lost worker productivity, health care costs,
and losses from tourism. Electric vehicles provide an exceptional
opportunity to reverse this trend.

In 1993, the U.S. Asia Environmental Partnership (USAEP) provided a
modest grant to Global Resources Institute (GRI), a U.S.-based
environmental non-governmental organization, to convert one diesel tempo
to run on electric power. Following a successful demonstration, USAID/Nepal
and USAEP provided additional funding to develop seven more electric tempos,
and to demonstrate the technical and economic viability of operating
the vehicles for public transportation. More than 200,000 passengers
travelled over 175,000 kilometers throughout Kathmandu in just six
months, demonstrating the viability and cost efficiency of using
electric vehicles as a major source of public transportation in
Nepal. This demonstration sparked the interest of private industry
and now, only one year later, an electric vehicle industry is taking
root in Nepal.

Accomplishments/Benefits: On February 20, 1996, the
keys to the fleet of seven electric tempos were passed from
GRI to the owners of the Nepal Electric Vehicle Industry (NEVI). This
private consortium of Nepali firms and business leaders not only will
continue operating the existing tempo fleet but has plans to
import and operate 23 additional electric tempos on the busiest
transport routes of Kathmandu within three months. The goal is to
have 100 tempos operating by year's end.

Discussions have taken place with over 50 private Nepali companies
and individuals who are interested in either manufacturing or
operating electric vehicles. USAID and GRI showed the way for these
firms by negotiating key fiscal reforms which provide financial
incentives for private sector investments in electric transportation.
In addition to NEVI, two private companies have been registered to
operate electric public transportation networks, which is
unprecedented in Asia. Two of these private firms plan to
manufacture, assemble, import and service electric vehicles. A local
dairy wants to purchase 40 electric delivery vehicles. Other South
Asian countries have already expressed an interest in acquiring
electric vehicle technology for their own public transport systems.

An increasingly liberal macro-economic policy environment has sparked
the growth of a dynamic private sector. The Government has reduced
duties on electric vehicle componentry and reduced income taxes for
investors. Nepal is poised to take the lead in importing,
manufacturing, assembling and operating appropriate types of electric
vehicles. To encourage development of this nascent industry, USAID
and GRI are assisting investors to establish viable electric vehicle
enterprises, establishing training programs for technicians and
operators, and lobbying government for additional incentives for investors.

U.S. Impact: Apart from
addressing the egregious air pollution in the Kathmandu Valley, the
Nepal Electric Vehicle Program has attracted U.S. investment to
Nepal. U.S. environmental technology has been successfully introduced
in Nepal, and U.S. manufacturing companies have entered into
partnership with Nepali firms to produce electric vehicles.